International Trade committee  Well, that would certainly reduce the emissions that would otherwise be associated with the transportation of both new and used vehicles from Korea into Canada. Certainly if we want to gain access to that market, we would have to transport vehicles to their market. Yes, that does have an environmental cost associated with it.

International Trade committee  Assembly units? In other words, assembled in Canada? Is that the question, Monsieur Cardin?

International Trade committee  I think we have to look at assembled and built in North America. There are no Korean plants in Canada. There is, as I mentioned, one plant, a Hyundai plant, in the southern United States and there is a Kia plant being constructed in Georgia. At this time, the best estimates are that we probably don't see that any more than 25% of what those Koreans sell in the Canadian market would be supplied by those North American plants.

International Trade committee  That's a very interesting question. Certainly that was, in essence, the results of the Auto Pact of 1965, that if you sell here, you shall produce here and you shall source from here. And that's what literally brought about, into Canada, many tens of thousands of job over decades, and it was a huge benefit to Canada's economy.

International Trade committee  Exactly. The 1990 data, for instance, does not recognize much of the transition that has taken place in the industry. You can well imagine that much has taken place between 1990 and now as it relates to the structural changes within the automotive industry--structural changes that are absolutely key to understanding the ramifications and implications for jobs in the auto industry in Canada.

International Trade committee  As it relates to used vehicles, we understand from last week's testimony that the Koreans have put the possibility...or are at least requesting that the prohibition on used vehicles into Canada be eliminated, as part of their demands.

International Trade committee  That would have quite a significant and detrimental impact on new vehicle sales, for one. These are vehicles that are relatively new. It would also be contrary, actually, to some of the environmental objectives we as an industry are being asked to meet--that is, reduce pollution, reduce greenhouse gas emissions.

International Trade committee  We would certainly agree that this is an alarmingly incomplete analysis. I fully agree with Mr. Stanford on the shortcomings of the economic analysis, as well as the environmental analysis. Even when you take the data that was used by the government, it shows we're going to be locked into a roughly $2 billion annual trade deficit.

International Trade committee  To the point where, today for instance, as a result of the free trade agreement in Canada, we build one and a half vehicles for every one we sell here. That's a pretty significant fact. The CVMA and our member companies have fully and publicly supported all of the free trade agreements that Canada has signed, but knowing what we know at this time, we cannot support the one currently being negotiated with South Korea, primarily for one reason.

International Trade committee  Thank you very much, Mr. Chairman and the members of the committee, for today's invitation to appear before you on this important subject. For 80 years, the CVMA has represented Canada's leading manufacturers of light and heavy-duty vehicles, which include Chrysler, Ford, General Motors, and International Truck and Engine Corporation.

Industry committee  I certainly agree with all that. I do want to apprise you of the fact that, if you're not already aware, there's already a consultation process going on. Certainly CVMA is responding to that, and I'd be glad to forward our comments to the committee for that purpose. In addition to that, it's what qualifies and doesn't qualify, which is another key factor here.

Industry committee  I'm not sure I agree with your analogy. You have to separate vehicle pricing from vehicle manufacturing investment. They're totally separate issues. But I can see why you're suggesting there could be this perception there. You just have to separate out vehicle manufacturing investment from vehicle pricing.

Industry committee  Now is now, and then was then.

Industry committee  It would be sold to an American consumer?

Industry committee  Thank you for that question. Mr. Arthur, first, I can't talk about vehicle pricing. I'm prohibited from doing so, collectively through the association and what we do, by the Competition Act. But I can say that as to what you've read in the papers, vehicle manufacturers are responding to that price differential by various means.